The proposed rule focuses on many issues including but not limited to:

Implementing certain parts of the Comprehensive Addiction and Recovery Act of 2016, aimed at establishing additional methods that Part D plans can use to reduce abuse or misuse of frequently abused drugs;

Changes to certain Medicare Advantage provisions relating to marketing and delivery of information;

Establishing “preclusion lists” under Medicare Advantage and Part D to limit when a Medicare Advantage organization and Part D plan sponsor may pay for a service or drug based on the provider who prescribed or furnished the service or drug;

Part D Network requirements relating to any willing provider, including defining mail-order pharmacy;

Within the proposed rule, CMS also included a request for information regarding the application of manufacturer rebates and pharmacy price concessions to drug prices at the point of sale. CMS has been gathering information regarding this topic for a number of years but appears to be seeking more detailed information in this request.

In the coming weeks we will be issuing detailed posts on these topics as well as others.

Based on the significance and number of the changes proposed, we anticipate that CMS will receive many comments from all segments of industry and beneficiary groups that may be affected by the proposed changes. Comments are due to CMS before 5:00 pm on January 16, 2018.

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released its 2018 Medicare Advantage and Part D Advance Notice and Draft Call Letter (“Draft Call Letter”). For the majority of the letter’s provisions, CMS is proposing to continue its current course of action and is refraining from introducing new policies. With that said, however, CMS is proposing several notable updates, including updates to the use of encounter data for risk adjustment and the 2018 Star Ratings. This blog is to highlight some key provisions and changes as MA and Part D plans prepare and finalize comments.

Last week, the OIG posted its Work Plan for 2017. In it, the OIG announced many goals touching on programs including, but not limited to, Medicare, Medicaid, Insurance Marketplace (Health Exchanges), Indian Health Service, TANF and Head Start. Below are some of the OIG’s action items that Medicare Advantage and Part D plans should be aware of. As in years past, most of the OIG’s goals relating to the Medicare program focus on whether CMS is properly administering and monitoring the programs. Although the OIG often targets CMS, this focus can result in increased OIG and CMS scrutiny for plans and plans’ first tier, downstream, and related entities. Continue Reading 2017 OIG Work Plan: For Medicare Plans

CMS issued its Audit Protocols and Data Requests for Medicare Advantage and Part D plans on November 4, 2016 (the “Protocols”). The Protocols have been updated based on the over 500 comments CMS received in response to the draft released in June. The Protocols are open for comments until December 5, 2016.

A review of the crosswalk detailing the changes made to 2016’s Audit Protocols and Data Requests shows that CMS largely retained the same elements as in years past and made a few notable changes.

CMS is no longer asking for “self-identified issues.” Self-identified issues were issues that had been discovered by the plan but not reported to CMS prior to the audit. Practically speaking, this now means that plans only receive “credit” for reporting issues to CMS, whereas previously plans received some favorable treatment for reporting self-identified issues through the audit.

The Protocols added more emphasis on fraud, waste, and abuse policies and operations as applied to a plan’s first tier, downstream and related entities (“FDR”).

The Protocols asked plans in multiple areas to identify whether they classify actions as compliance or FWA.

CMS modified (edited, deleted, and added) many questions that appear in the Protocols questionnaires. Some changes include:

Providing more detail to plans about what should be produced when conducting a formal audit under the plan’s compliance program.

Asking for examples of issues the plan had to deal with that involved an FDR and impacted a significant number of enrollees.

Asking for an example of when communicating compliance issues to the senior management/governing body was challenging.

Asking for a plan to share best practices.

All plans should carefully review the Protocols, consider how they would perform under the updated structure, and consider how they would update their internal audit and monitoring activities to reflect changes that CMS is considering. As all plans know, undergoing a CMS audit requires an enormous amount of time and resources and CMS’s audit findings can greatly impact plans in many ways, including how a plan performs in the Star ratings system.

Last week, CMS released a Fact Sheet announcing that it is further delaying enforcement of the Medicare Part D Prescriber Enrollment Requirements, with full enforcement to begin on January 1, 2019. Under the Medicare Part D Prescriber Requirements, Medicare Advantage and Part D plans must deny coverage of drugs prescribed by providers who are not enrolled in Medicare or who have not validly opted out of Medicare (except under limited circumstances). This represents the third delay since the requirements were finalized.

In an HPMS memo addressed to Part D Sponsors, CMS stated that this delay is in recognition of the need to minimize disruption to beneficiaries and to ensure that they have continued access to the care they need. It also provides Part D sponsors, their pharmacy benefit managers, and Medicare Advantage plans “sufficient time” to finalize system enhancements necessary to comply with these requirements. Continue Reading CMS Delays Enforcement of Part D Prescriber Enrollment Requirements

This Spring, CMS informed MAOs that offer Medicare Advantage EGWPs (employer group waiver plans) that they were no longer required to submit annual bids for EGWPs. Based on CMS’s explanation of why it adopted this change, it seems that the final score is CMS 2, EGWPs 1 or perhaps 0. CMS scores two points by reducing its own administrative burden because it no longer needs to review EGWP bids and it reduces costs because EGWPs will now be paid less (at least 2.5% less). EGWPs score one point because they are free of the administrative and actuarial burden of submitting a bid to CMS, but at what cost?

Under the new payment methodology, EGWPs will longer be paid based on their bid and applicable benchmark, rather they will be paid an amount established by comparing non-EGWP bids to the applicable benchmark (all adjusted for location, Star Ratings, and risk scores). This change was proposed for 2017, but CMS delayed the full implantation until 2018. For 2017, to ease EGWPs into the payment change, their payments will be based on comparing both non-EGWP and EGWP 2016 bids to the applicable benchmarks. This blended comparison should result in a smaller payment reduction in 2017. Continue Reading No More Bidding – CMS 2, EGWPs 1

The 2017 Call Letter proposes a variety of updates to the program, many that are designed to improve the accuracy of payments to plans serving beneficiaries dually eligible for Medicare and Medicaid (“dual eligibles”). Of note, CMS proposes updates to the risk adjustment model used to calculate payments to MA plans and to the Star Rating system used to evaluate plan performance. CMS stated that these proposed changes reflect the public comments received when it shared research findings on the accuracy of the CMS-HCC model for paying dual eligible beneficiaries and the impact of socioeconomic factors on the Star Ratings and solicited input. A few of the interesting 2017 proposals include: Continue Reading CMS Releases 2017 Advance Notice and Draft Call Letter

As Congress is back to Washington for its next work period, ML Strategies has published an Advisory outlining health care issues on the radar for the upcoming weeks. Highlights include: legislative initiatives on opioid abuse, mental health access, chronic care and a group of innovation bills; the FDA Commissioner nomination; and Medicare Advantage (MA) lobbying efforts.

ML Strategies reminds us that the current Congressional environment – with a possible diversion of resources to a FY 2017 budget, and the impact of Justice Scalia’s death and election year politics – will impact all legislative considerations, including health care initiatives.

Earlier today, my colleagues at ML Strategies published the Washington Outlook for 2016, offering their insights about what we might expect from Capitol Hill and the Administration in the coming year. The Outlook covers a wide range of issues and includes a preview of the US legislative agenda as well as a look at the Obama Administration’s regulatory plans.

With regard to health care, it is likely that the Administration’s signature health care law will continue to be at the forefront of its domestic agenda. ML Strategies says that we should expect additional activity on targeted bipartisan reform efforts to modify the ACA. Issues include:

The “30-hour work week” fix.

The Simplifying Technical Aspects Regarding Seasonality Act, or the “STARS Act,” which would exempt seasonal employees from the definition of “full time employee” of the ACA’s employer mandate.

The “Small Business Healthcare Relief Act,” which would allow for small businesses with fewer than 50 employees that do not offer health insurance coverage to establish a health reimbursement arrangement.

Efforts to address rising insurance prices in the exchanges, which could include efforts to modify insurance “rating,” or pricing rules.

Associate Editors

Mintz Levin’s Health Law Practice

As the health care and life sciences industries continue to undergo sweeping regulatory change, your company might be facing unprecedented structural and operational challenges. Heightened government scrutiny of industry practices certainly adds to the complexity of operating in the market for all providers, payors, manufacturers, distributors, and suppliers.Read More